“Do not save what is left after spending, but spend what is left after saving.” —Warren Buffett
Recently, I pulled into my local gas station. It was evening and there wasn’t much traffic inside or outside the store. In fact, I was the only one filling up.
That was, until another car came speeding around the corner and pulled up to the pump next to me. The engine of the sports car broke the quietness of the evening and was drowned out only by the squeal of his tires and eventually, the volume of the music pouring out his windows.
The driver quickly hopped out of his vehicle wearing a leather jacket and proceeded to fill his tank with premium gasoline.
It was quite a spectacular sight actually. A dark, still evening with no noise around us to speak of. Me, standing next to my white, 2005 Honda Accord. And him, right next to me, taking time to admire his brand new sports car.
We didn’t exchange any words. I don’t even recall him looking in my direction to acknowledge my existence. He was, I think, far too preoccupied with his vehicle.
I know nothing of this fellow or how he came to acquire his fancy new car. And I am passing no judgment on him. This is a story about me—not him.
Because in that moment, a surprising thought entered my head. I remember thinking (for better or worse), “You know, I could drive a car like that if I wanted. I could purchase a fancy new sports car, a leather jacket, even racing gloves if I wanted. But I choose not to.”
And it’s true. There are, I suppose, a few cars on the planet that I could not receive enough credit to acquire. But for the most part, there is nothing stopping me from driving an expensive, flashy sports car around town.
Except for maybe one thing.
The only thing stopping me from driving the same car I encountered at the gas station is I enjoy living within my means.
I like knowing I spend less than I make.
I mean, I could drive a more expensive car. I could buy a bigger house. I could take more lavish vacations or purchase more luxurious furniture. But I find a significant amount of pleasure knowing my expenses do not exceed my income.
Staying out of debt means I am not being hunted down by creditors. It means I am not carrying a financial burden from my past while also trying to provide for the present. It means I have freedom to make choices with my excess income. It means I can save if I want, give if I want, or spend if I want. Because I live within my means, I enjoy a significant level of freedom that others do not.
It allows me to sleep better, carry less stress, and live a more calm, relaxed life.
Our world works hard to convince us to outspend our means and then provides a thousand ways for us to do it—even delivering pre-approved cards of plastic directly to our front doors. And from the outside, a life built on credit may appear the life we desire—with its bright lights, bold colors, and the flashy impressions we are able to make.
But I’ll choose something different for my life. I’ll choose calm and peace and the knowledge that I have chosen responsibly. For there is a wonderful joy to be found in it.
I know there are any number of uncontrollable circumstances that may make this choice impossible for some—tragedy, medical emergencies, or unexpected career downsizing as examples. But for those who still have the choice, I don’t think you’ll ever regret spending less than you make.
Besides, I kinda like my Honda Accord.
I would like to add to the benefits the greatest benefit to me: freedom in career and work decisions. I remember the day I felt the pressure, but realized I had a pressure valve. I was an old young-adult (perhaps too early to say middle-aged) and the executives at my employer decided to push a real increase in commitment to multiple projects that resulted in more demands on people’s time. Some team leaders instantly gave in to the pressure and started requiring longer hours and more days from their salaried employees. I remember the pressure to do the same – but my commitment to family, church and community service would suffer, not to mention similar impact on my teammates’ lives. Then I felt the pressure relieve as the thought came to me, “We have enough saved to live on for a handful of months, even if they fired me, I don’t want to work in that environment and I would have time to find another job.” So I did not give in. When the demands came in, I prioritized them and let other teams know when we would be able to deliver, and when leaders asked why such long delivery dates, I told them – and informed them we needed more people if they wanted things delivered sooner. Our team was a great group of people, and they not only did not fire me, but my team became a place other people wanted to work because we fought for that work-life balance. That freedom to make professional choices which aren’t desperate and out of fear was only enabled because I was in the financial position to “put my money where my mouth was.” If I had consumer debt and lived pretty much paycheck to paycheck, I don’t think I could make those kinds of professional decisions.
I love this! What a wonderful experience. Thank you for sharing.
So… first comment.. be careful of arrogance for not spending and living minimally or thinking ” I am better” which you probably are internally with your life. I get you are happy with your choices… lots of assumptions are being made in this article.. aka… that people who have “stuff” carry debt or have baggage. Some people are OK.
You are not. That is good to know.. when we make our realizations about us and the benefits we feel.. super… but realize there is no one size fits all. I left this article thinking… just because you admit to being judgmental. Ask questions of the person you are judging, get curious.. rather than “assume” you have the correct view for more than yourself. best.
I do not read that Joshua is making those assumptions at all. He specifically pointed out he was talking about himself and himself only – that he could not purchase that car (or bigger house, etc.) and so on without living beyond his means. He never suggests that is what this person did.
“I know nothing of this fellow or how he came to acquire his fancy new car. And I am passing no judgment on him. This is a story about me—not him.”
I was going to write that it appears you are the one making assumptions, but Joshua literally told you he was not, he was only talking about himself. When you point a finger at someone else, your 3 other fingers are pointing back at you… You ignored what Joshua wrote, and made assumptions anyway. Things to consider…
Do you never buy anything on credit, not even a home? I ask because I know most people couldn’t own a home without going into debt. I personally owe nobody. My car is a 1998 Volvo S70 that I paid cash for a couple of years ago. It had about 100,000 miles on it and my mechanic says it will go 300,000 more. I save about a quarter of my income each month. I would like to buy a house but without a loan that could take many years. So, again, are you suggesting we not go into debt for even a house?
Most people do need to use credit for their house, but buying one that fits your budget is key.
My husband and I bought a house 10 plus years ago and paid it off 2 years ago. Now we truly owe nothing to anyone!
Still haven’t gone on a big trip but we did up the amount going into retirement and are thinking about the future more because it looks brighter.
Tbh, when I shop I still look for bargains but if we want steak I but good steak. I still like to buy my clothes on clearance, but if I really like something and it fits well, I buy it!
Renting is throwing money down the drain. Buying a house puts money to work. Interest rates are the lowest I’ve ever seen in my lifetime. Buy within your means and the money you borrow allows you build equity in the property. With the current housing market there is a good chance property values will rise faster than the cost of the loan. I paid my home off in 15 years through the 90’s to early 2000’s refinancing three times for lower interest and shorter terms. Currently it is valued over three times the purchase price.
I have a mortgage. This wasn’t about never having a mortgage or a business loan or a student loan, those can paid off within a person’s means. This was about living a lifestyle that you can’t afford in the long-run.
I agree that this slow life style brings freedom and peace of mind. I’ve build my life on this and I enjoy realizing that I am not a slave of my job, that I can take time off when I need it. Because I have savings and no debt besides mortgage.
If you set your lifestyle to save 10% of your earnings, you will need to work 9 years to save enough to live one without working. Conversely, if you set your lifestyle to save 90%, you could enjoy 9 years of not working for every year of work. Sure, these are extremes, but you get the point. There is a comfortable point on this curve for everyone. You would be surprised, however, how few people are even saving 10%.
I think people should own whatever they really want… for me, the problem with a “nice” car is that it impedes my day to day life. If I had a “nice” car I would worry about it getting scratched and the daily abuse it would take. That “cost” of ownership is not worth it to me.
I am exactly the same way. I don’t even want to be bothered.
“Do not save what is left after spending, but spend what is left after saving.” —Warren Buffett
I love this quote! And this is how I have been handling my personal finances for almost 25 years!
This also reminds me of a quote from “David Copperfield”:
“Annual income twenty pounds, annual expenditure nineteen [pounds], nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.” – Mr. Micawber
The man who had that car may very well have been able to afford it. While I get your point and I think what you’re saying is admirable, and while you claim it’s about you not him, you framed this whole piece around being the opposite of this guy.
And the opposite of you is someone with a ton stuff they can’t afford. But you don’t know a thing about that man. He may very well have bought those things for himself as a splurge after years of doing exactly what you are currently doing.
I noticed you claim you weren’t judging him but this sentence “He was, I think, far too preoccupied with his vehicle[,]” is very judgmental. Whether you realize it or not, you’ve framed your narrative for this piece with this stranger as the “bad guy” and you as the “good guy.” Or at least the righteous one.
Virtue is it’s own reward. And it doesn’t need to be compared or contrasted.
I had the same thought. Perhaps he has more than enough money to afford that car, and perhaps it makes him very happy. Maybe it is his hobby. Maybe he spends no more on that car than I spend on travel.
And on the flip side, I could easily afford such a car, but not having things I don’t need makes me happy, independent of whether I can afford them.
We should all strive to worry less about how other people choose to live their lives. His car is not your concern, period.
Actually, we should ALL be worried about how other people are spending. WE ALL pay for it in the long-run. Instead of being bullied into not judging, maybe it’s time we do because I’m tired of being told how “privileged” I am because I did the hard work of living within and below my means in order to remain debt free. Those who justify everything they do as everyone else judging them should remember they too, are judging someone else because they live at or below their means and put their money in the bank for the future.
I thought I was the only one thinking this. Everyone is different in how they want to enjoy their money. This article is passing judgment on how one should enjoy their savings or spend their money. You can save all you want and have the freedom to buy whatever your heart desire. God tells us money isn’t the problem, the root of it is. So if some man wants to buy a sports car and admire it, that’s his thing. We shouldn’t judge others because they got some shiny toy. We don’t know if he worked hard and saved for it.
I love the point you make when you say “staying out of debt means… I am not carrying a financial burden from my past while also trying to provide for the present”.
This is the whole reason why I want to get out of debt, because a decision you make in your past stays with you for years and years and I hate that feeling. Thank you for your poignant article and for your words of wisdom as always.
Hi Josh! I so get this. When we made that last mortgage payment it felt amazing. We own our home. We have no car payments or credit card debt. But what do you do when your college kid is facing school loans in excess of 100k and can’t get a loan without a consigner. We kinda feel like he and we are stuck between the rock and a hard place. Just wonder what others do or what you might suggest!
Community college the first 2 years is very inexpensive… not sure why everyone thinks the first 2 have to be at a more expensive school when it’s usually just the Gen Ed classes being completed… very few jobs require attendance at prestigious universities – most are looking for good grades, meaningful extracurricular activities, job experience (even part time with great references for work ethic and contribution…)
It may not be the right school for him.
My husband and I sent 3 to college, 2 of them to a private college. All engineers.
All three had scholarships that made school affordable for a pastor’s family.
Yes, they had debt, about 20,000 each that they all paid off within a couple years from graduation.
Community College and Trade Schools…. and for heavens sake, make sure that they major in something that’s going to pay that loan off in 2-3 yrs at the most!
The freedom and peace this way of living gives is insatiable, I constantly want more. Because of this, you want to make the right decisions. This article speaks so much to my heart. Thank you for reconfirming what I already know.
And he said to them, “Take care, and be on your guard against all covetousness, for one’s life does not consist in the abundance of his possessions.”
I’d love to live like this but one medical emergency and your savings are gone, which is exactly what happened to me.
That happened to me also. My husband had cancer and several surgeries. I’ve found that, because we live this way, our emergency fund quickly rebuilt itself. I put all medical bills on a 2 year payment plan. We had tens of thousands of dollars in bills that weren’t covered by insurance and we didn’t qualify for financial assistance. There isn’t any interest or fees if you make arrangements before they’re sent to collections. I also sold a few unwanted items to pay off as much as I could. I called the hospital and negotiated a lower amount. (yes, you can do that) I’m still paying on those bills, but I rebuilt my emergency fund at the same time. We also got off of my husband’s employer insurance and bought our own. We asked his boss to pay the same dollar amount toward it and he obliged, happy to get us off the plan and reduce his overall costs. Our new insurance costs more monthly and has a higher deductible, but covers 100%. There are many ways to manage medical bills, without going broke in the process.
I see the results in a a family members life still for always picking purchases above their well being .I was on vacation recently and they had a medical emergency which would eventually require 280 dollars . I had called the dental clinic before I left to see how much it was going to be and they said 200 …I left 200 dollars on with my mother before leaving for the airport
My brother texted me he would pay me back but I said no worries .I did text him back and say you should read Dave Ramsey’s book and start an emergency fund . My mother had been complaining loudly about his purchases on craiglist and free items he often hoards his house with . My mother often babied him and till she recently started dating a new person was always running his life .If he had an emergency he would run to her and she would always help.I almost did not help but I could not watch him in pain….
I am always expected to be responsible and never the driver of that red shiny car ….but I like the peace of mind…
Thanks for the reminder.
Wow I thought I had wrote that for a moment …exact same thing here with my brother and mother …
The wisdom behind this passage was so true. I have been in that situation in the past where I don’t have even the right to rest or even enjoy an ample time with my son just because my debtors would come knocking on my door for me to pay them. It was a hard way of learning on my side. I appreciate these kinds of articles.